Rs 60 cr unaccounted income unearthed in construction group linked to TRS MP

Reddy’s brother Prasad Reddy is CEO in the company while his son and wife are directors. The Income Tax (I-T) searches were conducted in late September this year on Raghava Constructions and residential premises of the TRS MP in which several key documents were seized.

| TNN | Nov 8, 2018, 19:53 IST

Representatve image (TOI)

New Delhi: Income Tax department has unearthed Rs 60 crore in alleged unaccounted income accumulated (black money) over the past few years by an infrastructure company, Raghava Construction group, associated with Telangana Rashtra Samithi (TRS) Member of Parliament from Khammam, P Srinivasa Reddy.

Reddy’s brother Prasad Reddy is CEO in the company while his son and wife are directors. The Income Tax (I-T) searches were conducted in late September this year on Raghava Constructions and residential premises of the TRS MP in which several key documents were seized related to undisclosed income of the group company. The I-T department is further investigating financial trails in the case which may reveal involvement of some other high profile politicians.

The action against close family members of TRS MP is seen as a crackdown on exposing political nexus in generation of black money. In the last few months the I-T department has searched several entities across India allegedly having links with lawmakers and high profile public authorities.

Denying any intention of tax evasion, Srinivasa Reddy told TOI that his infrastructure company, Raghava Constructions, has been declaring an annual profit of around 14% as against 2-3% declared by other infrastructure firms. “We are showing profit of 14.5% and all our income are tax paid. The documents seized by the I-T department are still under examination and if it finds any inaccuracies in the returns filed, we are ready to pay taxes as applicable,” Reddy said.

Investigation in teh case over the last one month revealed that the company had allegedly generated huge cash by raising fake invoices from its sub-contractors with the purpose of evading taxes. “One of the steel suppliers to the group admitted to the I-T department that it had been receiving payments through cheques and RTGS after which cash was withdrawn from banks and returned to the Reddys,” a source said.

Prasad Reddy was confronted with the evidence and statements of the sub-contractors recorded by I-T officials after which “the construction company admitted to an amount of Rs 29.75 crore as additional income on this account.”

The I-T department had taken out bank statements of the sub-contractors to corroborate RTGS payments made by Raghava Constructions followed with immediate cash withdrawals. “Verification of documents at Raghava Constructions revealed that there were no work orders or any supporting evidence to justify the huge payments made to sub-contractors,” the source said. Further questioning of Prasad Reddy revealed ‘expenditure’ of Rs 19 crore which was not supported by any evidence or bills.

Searches on other sub-contractors of the group revealed raising of fake bills to the tune of Rs 12 crore, taking the total unaccounted income unearthed over the past few years to over Rs 60 crore, the source added.

The I-T department had carried out searches on the group company and at the premises of its directors on September 18. The group is engaged in executing several government projects in Telangana, including Mission Kakatiya for rejuvenation of minor irrigation tanks and lakes and Mission Baghiratha, providing safe drinking waters to villages and urban localities in the state.

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